A Weighted Average Anti-Dilution is an anti-dilution mechanism that adjusts the conversion price of preferred stock in a down round based on a formula that considers both the lower issuance price and the number of shares issued, resulting in a more moderate adjustment than full ratchet. In VC term sheets, Weighted Average Anti-Dilution can be broad-based or narrow-based, and Weighted Average Anti-Dilution is a key lever for balancing investor protection with founder dilution.
Ryan RobertsStartup Lawyer
Ryan Roberts is a startup lawyer with more than two decades of experience advising on venture financings and M&A transactions totaling more than $1 billion. He is the author of the Amazon bestselling startup law book Acceleration.
